Facebook Pinterest Search Icon SourcingJournal_horiz Tumbler Twitter Shape photo-camera graph-trend Shape latest-news icon / user

Singapore PM: TPP Close to Conclusion; Fast-Tracking Issue a Central Concern

Missed Sourcing Journal’s Virtual Sourcing Summit? It's not too late to view all keynotes and panels from the two days. Watch on demand now.

According to Singapore Prime Minister Hsien Loong, negotiators are “very close” to finally concluding the Trans-Pacific Partnership (TPP) discussions.

Trade ministers from the twelve participating nations are soon to reconvene in Singapore for another crucial round of negotiations. Lee Hsien Loon expressed a cautious optimism regarding the upcoming talks. “I think we are very close to completing it. I think, nothwithstanding the previous missed targets, I think they are trying very hard, and we ought to be able to close this year.”

However, Lee Hsien Loong also related concerns regarding the consequences of the failure to broker a long-awaited compromise. He said, “If we don’t close this year, there is not much time left on the American political calendar to get it through congress and to settle the matter. And when time passes, loose ends get unravelled and then it would be a setback.”

Initially enjoying fast progress, the negotiations have been stalled by a contretemps between the U.S. and Japan. The U.S. has insisted that Japan move toward a tariff-free regime under the TPP, but Japan has resisted fully liberalizing its agricultural sector, nominating five product areas as “sacred,” which means effectively taken off the table for negotiation. Problematically, beef and rice are among the areas the U.S. has been equally insistent are, at the very least, open to the possibility of future revision.

The reverberations from this impasse have been significant, now halting the entirety of the negotiation process. Smaller nations have been exchanging concessions regarding intellectual property, regulatory reform, foreign investment and infrastructural improvements for additional access to both American and Japanese markets. However, that greater access is widely understood as contingent upon the prior opening of markets between the U.S. and Japan. And now a series of smaller arrangements have been imperiled by the stalled talks between the two industrial leaders. Australia is demanding increased access to the U.S. sugar market. Vietnam wants to eliminate trade barriers that saddle its exports with additional costs. Malaysia is anxious about its access to Western medicines. Brunei wants to protect its state-run enterprises. And the potential inclusion of South Korea and China into the mix, both of which have recently expressed an interest in inclusion late in the game, has only further muddied the waters.

Lee Hsien Loong also pinned the hopes of any future progress on the extension of trade promotion authority by the U.S. Congress. He said, “So they have to get the TPA, otherwise I think it’s a big trouble.”

If Lee is right, the TPP could potentially be undermined by the issue of trade promotion authority, or “fast-tracking,” which has only become more hotly disputed. Many experts attribute the stalled TPP talks, originally expected to conclude in December, to anxieties among the sovereign participants that, without trade promotion authority, Obama would be unable to make good on whatever promises he delivered. It has been widely reported that the most recent hurdle to an imminent settlement to negotiations is such an anxiety on the part of Japan, whose role in the talks is crucial to an eventual compromise. Japanese authorities worry that Obama no longer has the power to confidently promise congressional approval of any deal he might accept. This concern has only been exacerbated by intense disagreement among U.S. legislators over Obama’s executive trade promotion powers, or his power to expedite trade-related treaties through the process of congressional review.

Up until recently, lawmakers from both sides of the political aisle have endorsed the renewal of President Obama’s fast tracking authority. Last month, Sen. Max Baucus (D-Mont.) and Sen. Orrin Hatch (R-Utah) jointly lead the charge in favor of the bicameral proposal. Baucus argues, echoing a gathering consensus in Congress at large, that executive trade promotion authority is essential to the swift conclusion of important trade deals, especially the Trans-Pacific Partnership (TPP). Baucus said, “The TPA legislation that we are introducing today will make sure that these trade deals get done, and get done right. TPA legislation is critical to a successful trade agenda. It is critical to boosting U.S. exports and creating jobs, and it’s critical to fueling America’s growing economy.”

But recently, some notable Congressman, like Sen. Harry Reid (D-NV) have openly opposed the renewal of fast-tracking power. Only hours after President Obama encouraged Congress to renew his authority during his State of the Union address, Reid expressed his misgivings publicly. “I’m against fast track. Everyone would be well advised just to not push this right now.”

TPP negotiations include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S. and Vietnam, comprising approximately 40 percent of the global economy.

Related Articles

More from our brands

Access exclusive content Become a Member Today!